Trading Setups For the Coming Week
Sharing actionable trading setups with detailed charts in both Cash & Derivative markets to set you up for the following week.
Good Morning traders!
Winter season may be here, but the market bears are yet to go into any sort of hibernation, far from it!
As suggested in the previous newsletter, the rally was a pullback, and was cut short this week and the sell-off resumed in full force, with the Nifty index falling 650 points and closing at it’s weekly low indicating that this will continue in the week to come.
However, some counters still found huge buying interest and showed significant strength against the weak index. Some of them along with other bullish setups are given below, along with interesting setups in derivative stocks as well. Read on to find out!
FnO Space
I have provided below 2 setups which are very well poised for good R:R trades. Both are placed at critical zones, and it would be apt to wait for an indication regarding the ensuing direction and play that side. Here are those setups-
APOLLO HOSP DECEMBER FUTURES (CMP - 4800)
It is placed near it’s support zone @ 4600-4700, which is bolstered by the presence of the 100-Day MA @ 4712. Watch for signs of reversal or breakdown and trade the respective trend. See the chart below for targets & stop-losses for both long and short trades.
AXIS BANK DECEMBER FUTURES (CMP - 691.9)
Similar to the one above, this counter is placed at it’s support zone @ 685-695 as well, with additional support of the 20-Day MA coming @ 686. I have given the targets and stop-losses for both sides in the chart below. Interestingly, one can play both sides at once with bull-call ratio spreads & bear-put spreads (try only if you know these and can manage the positions if it goes adversely). Do check the chart below.
Stocks-In-Consolidation
These stocks are trading in defined ranges and are poised to give substantial moves depending on which side they break their zones. Since we can only play the upside, here are a few setups which can be added to the watchlist to watch for breakouts and catch the ensuing up-move. Those given below are symmetrical triangle formations, and can take long to breakout as well as reach their targets too. Patience is the key here!
ARMAN FINANCIAL (CMP - 937.5)
This stock has been in consolidation for the past 2 months and is doing so near it’s all-time highs. Any upside breakout can be of huge potential and this certainly should be one to watch for. One can target 200 points from the area of breakout, with SL below the upper trendline of triangle on a closing basis.
RAJRATAN GLOBAL WIRES (CMP - 2188.35)
Similar to the one above, this one is consolidating in a symmetrical triangle pattern as well. However, it is doing so for the last 5 months, & at it’s all-time highs too. Another one with huge potential should a breakout occur on the upside, one can aim for a massive 1000 points from the area of breakout, with a similar SL below the upper trendline of the triangle on a closing basis.
PS - Slightly illiquid security, so trade and manage positions accordingly!
Breakout Retest Trades
While there is vigorous trend-changing selling across the broader market, some have retraced to their previous breakout zone on low volumes, indicating a cool-down rather than a weakness. These are superb setups in terms of R:R and can be traded easily as well. Here are some of them below -
TRANSPORT CORPORATION OF INDIA (CMP - 737.45)
This stock gave a breakout the previous week and has given a low-volume pullback to that level. Breakout occured on significant volume as well. Longs can be initiated at current levels, targeting previous swing high @ 770 and above @ 820, with SL below 705 on a closing basis.
AB CAPITAL (CMP - 116.6)
This stock gave a significant breakout last week, taking out a falling resistance trendline with strong volume activity. This indicates change in the trend, and a pullback has occurred giving great opportunity to enter here. Crucially, it is also supported by the 20 & 50 Week MA @ 110 & 112 respectively. With a great R:R, longs can be initiated at current levels with a positional target of 140, with SL below 108 on a closing basis.
CLEAN SCIENCE AND TECH (CMP - 2411)
This has already shown bullish signs after giving a pullback, with significant volume buying occuring (shown in the chart). Another case of strong volume breakout and low volume pullback, one can initiate longs at current levels with a positional target @ 2650, and a SL below 2280 on a closing basis. Check the chart below to see the interesting volume activity.
Breakout Stocks
Raging against the bearish sentiment, a particular counter showed immense buying activity and gave a breakout from a huge consolidation. Read below to know which one and it’s trade setup.
MANAKSIA ALUMINIUM (CMP - 24.25)
This stock has given a breakout from a 7-month consolidation with immense volumes. Such a significant breakout usually indicates further strength and up-move in the counter. One can play the long side with positional targets @ 30, and SL below 20.5 on a closing basis. For a better R:R, risk-averse traders can look for a pullback at 22-23 levels. Do check the chart below to see the significant breakout.
That’s it from my side for the coming week as far as trade setups are concerned. With volatility being rife, it is advisable to trade with tight stops. Please undertake appropriate risk management while taking every trade.
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Disclaimer - Charts, analysis and trading ideas shared above are purely for educational purposes. Please consult your financial advisor before taking action in financial markets.